More than 3.5 million people have lost their millionaire status due to rising inflation

The decline is the result of a drop in global wealth for the first time since the 2008 financial crisis, UBS and Credit Suisse said in a report. : DENISE BALIBOOZ

More than 3.5 million people lost their millionaire status last year as soaring inflation and the collapse of world currencies hit the cost of private capital.

The number of people with assets totaling $1 US m (£790,000) fell from 62.9 million to 59.4 million during 2022, UBS and Credit Suisse report.

The UK experienced the third largest drop in the world, with the number of millionaires falling by 440,000 to 2.6 million.

This decline is the result of a drop in global wealth for the first time since the 2008 financial crisis.

Private wealth fell by 2.4% to $454.4 trillion at the end of 2022 to $11.3. trillion was wiped from the value of personal assets due to high inflation and a weakening currency.

The report blames Russia's invasion of Ukraine for boosting inflation last year, forcing central banks around the world to quickly raise interest rates.

Higher borrowing costs have hampered economic growth and contributed to the depreciation of currencies against the US dollar.

The loss of global wealth was most felt in North America and Europe, which together lost $10.9 trillion. Russia, however, was among the countries that recorded the largest increase in wealth and added 56 millionaires.

Nannette Heckler-Fyde'Erbe of Credit Suisse said: “The evolution of wealth has proven robust in the era of COVID-19 and has grown at a record pace in 2021. But inflation, rising interest rates and a depreciating currency caused a reversal in 2022.»

However, the report notes that there are still four times as many «US dollar millionaires» in the world as there were at the turn of the century.

Meanwhile, banks expect global wealth to rise 38% to $629 trillion by 2027, with the number of millionaires rising to 86 million over that five-year period.

Separate study of the Billionaires Index Bloomberg revealed that the world's 500 richest people lost a total of $1.4 trillion in 2022. This includes the world's richest man, Elon Musk, whose fortunes dropped $138 billion the same year he bought Twitter for $44 billion.

Mark Zuckerberg, Facebook co-founder and CEO of Meta, had a net worth of nearly $81 billion at the end of 2022, leaving him worth $45 billion.